VR Market to Pick Up the Pace in Late 2017

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The market for augmented reality (AR) and virtual reality (VR) headsets got off to a slower than expected start at the beginning of 2017, but things are poised to turn around toward by the end of the year.

“Virtual reality has suffered from some unrealistic growth expectations in 2017, but overall the market is still growing at a reasonable rate and new products from Microsoft and its partners should help drive additional interest in the final quarter of this year,” observed IDC vice president Tom Mainelli, vice president in a statement.

virtual reality market, AR market

Microsoft is gearing up for the Oct. 17 release of the Windows 10 Fall Creators update, which will include software components geared toward producing virtual experiences. Meanwhile, Dell, HP, Lenovo and other hardware partners are getting ready to ship comparatively affordable Windows Mixed Reality headsets that capitalize on the new capabilities in the system software.

“As we head into 2018 we’ll see additional new products appearing, including standalone headsets from major players, and we expect to see a growing number of companies embracing the technology to enable new business processes and training opportunities,” added Mainelli.

IDC expects AR and VR shipments to total of 13.7 million units in 2017. By 2021, that figure is expected to reach 81.2 million.

Buoyed by business demand, the AR segment of the market will generate hearty sales for vendors, according to IDC research analyst Jitesh Ubrani.

“AR headset shipments today are a fraction of where we expect them to be in the next five years, both in terms of volume and functionality. AR headsets are also on track to account for over $30 billion in revenue by 2021, almost twice that of VR, as most of the AR headsets will carry much higher average selling prices with earlier adopters being the commercial segment,” said Ubrani in prepared remarks.

Consumers won’t be left out of the AR scene. Ubrani expects that most consumers will use mobile devices to get their AR fix. Eventually, applications powered by AR frameworks like Apple ARKit and Google ARCore will make their way to consumer-grade headsets, he added.

Nonetheless, VR headsets will dominate the market in the foreseeable future. VR will account for 90 percent of the overall market in 2019. By 2021, the segment will still cling to well over 70 percent of the market.

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.